Risk Factors - VRTX

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Item 1A., Risk Factors –

“Competing products and technological advances from our competitors may negatively affect our business and market

position.” of this Annual Report on Form 10-K.

GOVERNMENT REGULATION

Our operations and activities are subject to extensive regulation by numerous government authorities in the U.S., Europe

and other countries, including with respect to the testing, manufacture, labeling, storage, record keeping, approval, pricing

and price reporting, and advertising and promotion of our products.

Regulations Concerning Product Development and Approval

United States. The process for obtaining regulatory approvals to market a new pharmaceutical product, or an additional

indication of an existing product, requires substantial effort and financial resources and takes several years to complete. The

applicant must complete preclinical tests and submit protocols to the FDA before commencing clinical trials. Clinical trials

are intended to establish the safety and efficacy of the pharmaceutical product and typically are conducted in sequential

phases, although the phases may overlap or be combined. If the required clinical testing is successful, the results are

submitted to the FDA in the form of an NDA or BLA requesting approval to market the product for one or more indications.

The FDA reviews an NDA or BLA to determine whether a product is safe and effective for its intended use and whether its

manufacturing is compliant with cGMP.

The FDA can employ several tools to facilitate the development of certain drugs or expedite certain applications,

including fast track designation, Breakthrough Therapy designation, regenerative medicine advanced therapy designation,

priority review, accelerated approval, incentives for orphan drugs developed for rare diseases and others.

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Compliance with regulatory requirements is assured through periodic, announced or unannounced inspections by the

FDA and other regulatory authorities, and these inspections associated with clinical development may include the sponsor,

investigator sites, laboratories, hospitals and manufacturing facilities of our subcontractors or other third-party manufacturers.

Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, including rejection

of an NDA or BLA.

Even if an NDA or a BLA receives approval, the applicant must comply with post-approval requirements. For example,

holders of an approval must report adverse reactions, provide updated safety and efficacy information and comply with

requirements concerning advertising and promotional materials and activities. Also, quality control and manufacturing

procedures must continue to conform to cGMP after approval, and certain changes to the manufacturing procedures and

finished product must be submitted and approved by the FDA prior to implementation. The FDA periodically inspects

manufacturing facilities to assess compliance with cGMP, which imposes extensive procedural and record keeping

requirements. In addition, as a condition of approval, the FDA may require post-marketing testing and surveillance to further

assess and monitor the product's safety or efficacy after commercialization, which may require additional clinical trials,

patient registries, observational data or additional work on chemistry, manufacturing and controls. Any post-approval

regulatory obligations, and the cost of complying with such obligations, could expand in the future. Further, the FDA

continues to regulate product labeling and prohibits the promotion of products for unapproved or “off-label” uses along with

other labeling restrictions.

Outside the United States. We are subject to similar regulatory requirements outside the United States for approval and

marketing of pharmaceutical products. We must obtain approval of a clinical trial application or product from applicable

supervising regulatory authorities before it can commence clinical trials or marketing of the product in target markets. The

approval requirements and process for each country can vary, and the time required to obtain approval may be longer or

shorter than that required for FDA approval in the United States. For example, we may submit marketing authorizations in

the E.U. under either a centralized or decentralized procedure. The centralized procedure is mandatory for the approval of

biotechnology products and many pharmaceutical products and provides for a single marketing authorization that is valid for

all E.U. member states. Under the centralized procedure, a single marketing authorization application is submitted to the

European Medicines Agency. After the agency evaluates the application, it makes a recommendation to the European

Commission, which then makes the final determination on whether to approve the application. The decentralized procedure

provides for mutual recognition of individual national approval decisions and is available for products that are not subject to

the centralized procedure.

In April 2023, the European Commission adopted a proposal to revise the E.U. pharmaceutical legislation. In April 2024,

the European Parliament introduced amendments to the European Commission’s proposal. The legislative process remains

ongoing, with several stages still required before the reform can receive final approval. Once completed, the reform is likely

to be the most comprehensive overhaul of E.U.’s medicines regulation in over 20 years, with a wide range of impacts

including on approval procedures, regulatory data protection, and environmental protection measures. Once approved, certain

provisions of the reform could potentially have an adverse impact on our business.

The requirements governing the conduct of clinical trials and product licensing also vary. In addition, post-approval

regulatory obligations such as adverse event reporting and cGMP compliance generally apply and may vary by country. For

example, after a marketing authorization has been granted in the E.U., periodic safety reports must be submitted and other

pharmacovigilance measures may be required.

Regulations Concerning Pricing and Reimbursement

Sales of our products depend, to a large degree, on the extent to which our products will be reimbursed by third-party

payors, such as government health programs, commercial insurance companies, and managed health care organizations.

Increasingly, these third-party payors are becoming stricter in the ways they evaluate and reimburse medical products and

services. Additionally, the containment of health care costs has become a priority of many governments, and the prices of

drugs have been a focus in this effort. The U.S. government, state legislatures and foreign governments have shown

significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement and

requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of

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more restrictive policies in jurisdictions with existing controls and measures, could limit our revenues. Decisions by third-

party payors to not cover a product could reduce physician usage of the product.

United States. In the U.S., we participate in the Medicaid Drug Rebate Program, Medicare, and other governmental

pricing programs. Medicaid is a joint federal and state program that is administered by the states for low-income and disabled

beneficiaries. Under the Medicaid Drug Rebate program, we are required to pay a rebate to each state Medicaid program for

our covered outpatient drugs, which includes select inpatient drugs for which there is “direct reimbursement.” Medicaid

rebates are based on pricing data reported by us on a monthly and quarterly basis to CMS, the federal agency that administers

the Medicaid and Medicare programs.

Any company that participates in the Medicaid Drug Rebate Program also must participate in the 340B drug pricing

program (the “340B program”), and the Federal Supply Schedule (“FSS”) pricing program. The 340B program, which is

administered by the Health Resources and Services Administration, requires participating companies to agree to charge

statutorily defined “covered entities” no more than the 340B “ceiling price” for covered outpatient drugs. The 340B ceiling

price is calculated using a statutory formula, which is based on pricing data calculated under the Medicaid Drug Rebate

Program. The FSS pricing program, which is administered by the Department of Veterans Affairs (“VA”), also requires

participating companies to extend discounted prices to the VA, Department of Defense, Coast Guard, and Public Health

Service. Similar to the 340B program, FSS prices are calculated utilizing pricing data reported by us to the VA on a quarterly

and annual basis.

Medicare is a federal program that is administered by the federal government. The program covers individuals age 65

and over as well as those with certain disabilities. Medicare Part A generally covers certain inpatient hospital services for

eligible beneficiaries. Prescription drugs that are used as part of an inpatient hospital stay will be covered by Medicare Part A,

and these products typically are paid as part of a bundled or composite rate (e.g., diagnosis related group).

Medicare Part D provides coverage to enrolled Medicare patients for self-administered drugs (i.e., drugs that are not

administered by a physician). Medicare Part D is administered by private prescription drug plans approved by the U.S.

government. Subject to certain statutory parameters, each drug plan establishes its own Medicare Part D formulary for

prescription drug coverage and pricing, which the drug plan may modify from time-to-time. The prescription drug plans

negotiate pricing with manufacturers and pharmacies, and may condition formulary placement on the availability of

manufacturer discounts.

The U.S. government has shown significant interest in implementing cost-containment programs for medicines and has

enacted reforms at the federal level designed to, among other things, modify prescription drug reimbursement amounts and

methodologies, and otherwise control health care costs. For example, the Patient Protection and Affordable Care Act

(“ACA”) was enacted in March 2010 and was designed to expand coverage for the uninsured while at the same time

containing overall health care costs. With regard to pharmaceutical products, among other things, the ACA was designed to

expand and increase manufacturer rebates for drugs covered under Medicaid programs, impose an annual fee on branded

pharmaceutical manufacturers, subject biological products to potential competition by lower-cost biosimilars, and make

changes to the coverage requirements under the Medicare Part D program. Additionally, in August 2022, the Inflation

Reduction Act (“IRA”) was enacted, establishing a Medicare Drug Price Negotiation Program, a Medicare inflationary

rebate, and a redesign of the Part D benefit structure. Certain drugs, including our CF medicines and CASGEVY, currently

are excluded from the IRA negotiation program. Nevertheless, other elements of the IRA may have a material impact on our

business, including the redesign of the Part D benefit and the Manufacturer Discount Program, which requires manufacturers

to take on more of the beneficiary cost previously subsidized by the federal government through the application of increased

drug discounts.

We anticipate that the U.S. government will continue to engage in activities seeking to address drug pricing and

reimbursement. Furthermore, certain states have enacted laws establishing Prescription Drug Affordability Boards

(“PDABs”). Some state PDABs, including those in Colorado, Maryland, Washington, and Minnesota, either have the

authority or have defined a pathway pursuant to which they may be granted the authority to establish upper payment limits

for prescription drugs. In certain states, there is pending litigation that would establish a PDAB or expand the authority of an

existing PDAB. Additionally, the U.S. government continues to focus on obtaining most-favored-nation pricing on U.S.

prescription drug prices in government programs. For example, CMS recently issued a proposed rule called the Guarding

U.S. Medicare Against Rising Drug Costs Model (“GUARD”). GUARD is a proposed mandatory model that would assess

rebates for certain drugs payable under Medicare Part D if the prices exceed those paid in economically comparable

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countries. While there is significant uncertainty around the potential implementation of GUARD and related executive orders

and rulemaking, implementation of mandatory initiatives could result in reduced pricing and reimbursement for our products.

Outside the United States. In Europe and other foreign jurisdictions, the success of our products depends largely on

obtaining and maintaining government reimbursement, because patients are generally unable to access prescription

pharmaceutical products that are not reimbursed by their governments. In some countries, such as Germany, commercial

sales of a new product may begin while pricing and reimbursement terms are under discussion. In other countries, a company

must complete reimbursement negotiations prior to the commencement of commercial supply of the pharmaceutical product.

The requirements governing drug pricing vary widely country-by-country and region-by-region. For example, the

member states of the E.U. can restrict the range of drugs for which their national health insurance systems provide

reimbursement and can control the prices of prescription drugs. Many countries in the E.U. also attempt to contain drug costs

by engaging in some form of reference pricing in which authorities examine pre-determined internal or external markets for

published prices of a product or national class of drugs. In addition, many ex-U.S. government payors require companies to

provide health economic assessments of products, which are evaluated by government agencies set up for this purpose. A

member state may approve a specific price for the drug, or it may instead adopt a system of direct or indirect controls on the

total amount of money that a company may receive for supply of a drug. Countries also may consider increasing mandatory

discounts over time in an attempt to manage increased demands on healthcare budgets. Reimbursement discussions in foreign

countries often result in a reimbursement price that is lower than the net price that companies can obtain for the product in the

U.S.

In addition, reimbursement discussions may take a significant period of time resulting in commercialization delays. In

some countries where reimbursement has not yet been obtained, or where there are a limited number of eligible people and

our medicines or therapies are unregistered, the governments of such countries may agree to purchase our medicines and

therapies on an unlicensed and/or named patient basis. Reimbursement for our products cannot be assured because a country

or region may only provide for reimbursement on terms that we do not deem adequate.

Further, many governments outside of the U.S. have introduced or are in the process of introducing legislation focusing

on cost containment measures in the pharmaceutical industry. The impact of these laws where finalized, the final form of

laws under consideration, and their relevant practical application, are unknown at this time, but may lead to lower prices,

paybacks, or other forms of discounts or special taxes. Reforms in our product markets, including those that may stem from

periods of uneven economic growth or downturns or uncertainty, or as a result of high inflation, emergence, or escalation of,

and responses to, international tension and conflicts, or government budgeting priorities, may continue to result in added

pressure on pricing, access, and reimbursement for our products.

Other Regulations

The manufacturing process for pharmaceutical products is highly regulated and regulators may shut down manufacturing

facilities that they observe are not complying with regulations. We, our commercial manufacturing organizations (“CMOs”)

and our corporate partners are subject to cGMP, which are extensive regulations governing manufacturing processes, stability

testing, record keeping and quality standards as defined by FDA and EMA. Similar regulations are in effect in other

jurisdictions. Suppliers of key components and materials must be named in the NDA or marketing authorization application

filed with the regulatory authority for any product candidate for which we are seeking marketing approval, and significant

delays can occur if the qualification of a new supplier is required. Even after our facilities or a third-party supplier is qualified

by the regulatory authority, investment and effort must continue to be expended in the areas of production and quality control

to maintain full compliance with applicable regulatory requirements, including cGMP. Our manufacturing operations and

third-party suppliers are subject to regular periodic inspections by regulatory authorities following initial approval.

Pharmaceutical companies must also monitor information on side effects and adverse events reported during clinical

studies and after marketing approval and report such information and events to regulatory agencies. Non-compliance with the

applicable safety reporting requirements may result in civil or criminal penalties. Side effects or adverse events that are

reported during clinical trials can delay, impede or prevent marketing approval. Based on new safety information that

emerges after approval, the FDA can mandate product labeling changes, impose risk evaluation and mitigation strategies,

require new post-marketing studies (including additional clinical trials) or suspend or withdraw approval of the product.

These requirements may affect our ability to maintain marketing approval of our products or require us to make significant

expenditures to obtain or maintain such approvals.

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Pharmaceutical companies are also subject to various laws pertaining to healthcare “fraud and abuse,” including the

federal Anti-Kickback Statute (“AKS”), the False Claims Act (“FCA”), and other state and federal laws and regulations in

and outside of the U.S. In the U.S., the Anti-Kickback Statute generally makes it illegal to knowingly and willfully solicit,

offer, receive or pay any remuneration in return for or to induce the referral of business, including the purchase or

prescription of a particular drug that is reimbursed by a state or federal health care program. The FCA prohibits knowingly

and willingly presenting or causing to be presented for payment to third-party payors (including Medicare and Medicaid), any

claims for reimbursed drugs or services that are false or fraudulent, claims for items or services not provided as claimed or

claims for medically unnecessary items or services. Violations of fraud and abuse laws may be punishable by criminal and/or

civil sanctions, including fines and civil monetary penalties, as well as by the possibility of exclusion from federal healthcare

programs (including Medicare and Medicaid). Liability under the FCA may also arise when a violation of certain laws or

regulations related to the underlying products (e.g., violations regarding improper promotional activity, manufacturing

regulations, or unlawful payments) contributes to the submission of a false claim. If we were subject to allegations

concerning, or convicted of violating, these laws, our business could be harmed.

Laws and regulations also have been enacted by the federal government and various states to regulate the sales and

marketing practices of pharmaceutical manufacturers. The laws and regulations generally limit financial interactions between

manufacturers and health care providers, require manufacturers to adopt certain compliance standards or require disclosure to

the government and public of such interactions. The laws include U.S. federal and state “sunshine” provisions. The federal

sunshine provisions apply to pharmaceutical manufacturers with products reimbursed under certain government programs

and require those manufacturers to disclose annually to the federal government (for re-disclosure to the public) certain

payments and other transfers of value made to physicians, physicians assistants, advanced practice registered nurses, and

teaching hospitals. State laws may also require disclosure of pharmaceutical pricing information and marketing expenditures.

Many of these laws and regulations contain requirements that are subject to interpretation. Outside the U.S., other countries

have implemented laws and regulations limiting financial interactions between manufacturers and health care providers and

providing requirements for disclosure of financial interactions with healthcare providers and additional countries may

consider or implement such laws.

We are subject to various federal and foreign laws that govern our international business practices with respect to

payments to government officials. Those laws include the U.S. Foreign Corrupt Practices Act (“FCPA”), which prohibits

U.S. companies and their representatives from paying, offering to pay, promising, or authorizing the payment of anything of

value to any foreign government official, government staff member, political party, or political candidate for the purpose of

obtaining or retaining business or to otherwise obtain favorable treatment or influence a person working in an official

capacity. In many countries, the health care professionals we regularly interact with may meet the FCPA’s definition of a

foreign government official. We are also subject to U.K. Bribery Act 2010 (“the Bribery Act”), which proscribes giving and

receiving bribes in the public and private sectors, bribing a foreign public official, and failing to have adequate procedures to

prevent employees and other agents from giving bribes. U.S. companies that conduct business in the U.K. generally will be

subject to the Bribery Act.

We are subject to extensive privacy and data protection laws and regulations concerning the collection, use and sharing

of personal data. We routinely collect and use sensitive personal information relating to health. The legislative, regulatory and

litigation landscape for privacy and data protection requirements is rapidly evolving and changing, and may limit our ability

to use data globally or across borders. For example, the E.For example, the E. U. General Data Protection Regulation (“GDPR”) imposes

obligations on us with respect to our processing of personal data and the cross-border transfer of such data, including higher

standards of obtaining consent, more robust transparency requirements, data breach notification requirements, requirements

for contractual language with our data processors, and stronger individual data rights. In addition, several U.S. jurisdictions

have similar data privacy laws, such as the California Consumer Privacy Act and California Privacy Rights Act. Data

protection requirements are not universal and can conflict between jurisdictions. There has also been an increase in

enforcement actions from the Federal Trade Commission, with a specific focus on companies operating health-related

websites. Compliance with these laws and regulations is made more complex by the lack of consistent standards, common

definitions, or clear regulatory expectations. At the same time, enforcement of these laws and regulations is increasing and

litigation, fines, and penalties are also becoming more common.

In addition, as we expand our pipeline and contemplate different approaches that may incorporate the use of medical

devices, such approaches may necessitate compliance with regulatory laws applicable to medical devices, including those

governing the testing, manufacture, approval, distribution, and marketing of medical devices. Furthermore, the extent of

government regulation, which might result from future legislation or administrative action, cannot accurately be predicted.

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EMPLOYEES AND HUMAN CAPITAL MANAGEMENT

As of December 31, 2025, we had approximately 6,400 employees. Of these employees, approximately 5,200 were based

in the U.S. and approximately 1,200 were based outside the U.S. None of our U.S. employees are covered by a collective

bargaining agreement. A small number of employees outside the U.S. are covered by such agreements due to local law or

industry requirements. We consider our relations with our employees to be good.

We rely on skilled, experienced, and innovative employees to conduct the operations of our company. The biotechnology

industry is very competitive, and recruiting and retaining such employees is important to the continued success of our

business. We are committed to building an outstanding, committed, and passionate team, and we focus on a culture that

values all employees. We focus on recruiting, retaining, and developing qualified and talented employees from a range of

backgrounds to conduct our research, development, commercial, and other business activities because we believe that each

employee brings unique perspectives and strengths, and by embracing these strengths, we can do our best work for patients.

We support our employees through a variety of initiatives including learning resources and forums that promote

belonging in our workplaces; five global employee resource networks open to all employees that promote connectivity and

collaboration across levels and functions; and investments that advance access to opportunity in our surrounding

communities.

To promote our employees’ continued well-being, we offer comprehensive benefits and resources, including those

focused on health and income protection, such as life insurance and retirement savings programs. We continue to promote

and enhance wellness tools supporting our employees’ mental, social, physical and financial health. We continually review

and augment our programs to include benefits that support the evolving needs of our workforce.

In addition, we provide our employees with career development and advancement opportunities, including job rotations,

mentoring, and training. We are committed to identifying and developing our next generation of leaders, which is reflected in

our manager excellence and talent readiness programs designed for critical roles in our organization.

OTHER MATTERS

Financial Information and Significant Customers

We operate in one segment, pharmaceuticals. Financial information about our revenue by product and significant

customers is set forth in Note Q, “Segment Information,” to our consolidated financial statements included in this Annual

Report on Form 10-K.

Information Available on the Internet

Our internet address is www.vrtx.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current

reports on Form 8-K, and all amendments to those reports, are available to you free of charge through the “Investors/

Financial Information/SEC Filings” section of our website as soon as reasonably practicable after those materials have been

electronically filed with, or furnished to, the Securities and Exchange Commission.

Corporate Information

Vertex was incorporated in Massachusetts in 1989, and our principal executive offices are located at 50 Northern Avenue

Boston, Massachusetts 02210.

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INFORMATION ABOUT OUR EXECUTIVE OFFICERS

The names, ages and positions held by our executive officers are as follows:

Dr. Kewalramani has been our Chief Executive Officer (CEO”) and President since April 2020 and a member of our

Board of Directors since February 2020. Dr. Kewalramani was our Executive Vice President and Chief Medical Officer from

April 2018 through April 2020. She was our Senior Vice President, Late Development from February 2017 until April 2018.

Dr. Kewalramani also served on the board of Ginkgo Bioworks from September 2021 to June 2024. From August 2004 to

January 2017, she served in roles of increasing responsibility at Amgen Inc., most recently as Vice President and Head of

U.S. Medical Organization. From 2014 through 2019, Dr. Kewalramani was the industry representative to the FDA’s

Endocrine and Metabolic Drug Advisory Committee. She completed her internship and residency in Internal Medicine at the

Massachusetts General Hospital and her fellowship in Nephrology at the Massachusetts General Hospital and Brigham and

Women’s Hospital combined program. Dr. Kewalramani holds a B.A. from Boston University and an M.D. from Boston

University School of Medicine. She is an alumna of the Harvard Business School, having completed the General

Management Program.

Dr. Leiden is our Executive Chairman, a position he has held since in April 2020. He was our Chief Executive Officer

and President from 2012 through March 2020. He has been a member of our Board of Directors since July 2009, the

Chairman of our Board of Directors since May 2012, and served as our lead independent director from October 2010 through

December 2011. Dr. Leiden was a Managing Director at Clarus Ventures, a life sciences venture capital firm, from 2006

through January 2012. Dr. Leiden was President and Chief Operating Officer of Abbott Laboratories, Pharmaceuticals

Products Group, and a member of the Board of Directors of Abbott Laboratories from 2001 to 2006. From 1987 to 2000, Dr.

Leiden held several academic appointments, including the Rawson Professor of Medicine and Pathology and Chief of

Cardiology and Director of the Cardiovascular Research Institute at the University of Chicago, the Elkan R. Blout Professor

of Biological Sciences at the Harvard School of Public Health, and Professor of Medicine at Harvard Medical School. He is

an elected member of both the American Academy of Arts and Sciences and the Institute of Medicine of the National

Academy of Sciences. Dr. Leiden was a director and the non-executive Vice Chairman of the board of Shire plc, from 2006

to January 2012, a director of Quest Diagnostics, from December 2014 to May 2019, and the Chairman of Revolution

Healthcare Acquisition Corp., from April 2021 to December 2022. Dr. Leiden received his M.D., Ph.D. and B.A. degrees

from the University of Chicago.

Dr. Atkinson has been our Executive Vice President, Chief Technical Operations Officer, Head of Biopharmaceutical

Sciences and Manufacturing Operations since August 2023. He previously served as our Senior Vice President, Head of

Commercial Manufacturing and Supply Chain since July 2020. Prior to joining us, Dr. Atkinson served in various roles at

Bristol-Myers Squibb Co., including as Senior Vice President, Global Manufacturing Operations from September 2019 to

June 2020; Vice President and Integration Leader, Corporate Cell Therapy and Global Development and Manufacturing from

January 2019 to September 2019; Vice President, Internal Manufacturing, Biologics from June 2017 to January 2019; and

Vice President, Biologics Development and Clinical Manufacturing from 2012 to June 2017. Before Bristol-Myers Squibb,

he held various roles at Cook Pharmica, LLC (now owned by Novo Holdings) and Eli Lilly. Dr. Atkinson served as a

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member of the Board of Directors of 89bio, Inc. from February 2022 until October 2025, when it was acquired by Roche. Dr.

Atkinson holds a B.S. in Biology from Indiana University and a Ph.D. in Biological Sciences from Stanford University.

Mr. Biller has been our Executive Vice President, Chief Legal Officer since September 2022. From November 2019 until

he joined us, Mr. Biller served in several executive roles at Agios Pharmaceuticals, Inc., including Chief Legal Officer and,

most recently, Chief Financial Officer and Head of Corporate Affairs. Prior to Agios, he served as Executive Vice President,

General Counsel at Celgene from July 2018 to November 2019, where he was responsible for their global legal function, and

served as Senior Vice President, Tax and Treasury from 2011 to June 2018. Prior to Celgene, Mr. Biller was General

Counsel, Chief Tax Officer and Secretary at Bunge Limited, a global publicly traded agriculture and food company. Earlier in

his career he held various leadership roles at Alcon, Inc. and was a partner at Hopkins & Sutter and Foley & Lardner. Mr.

Biller holds a B.A. from Brown University and a J.D. from Yale Law School.

Dr. Bozic is our Executive Vice President, Global Medicines Development and Medical Affairs, a position she has held

since October 2019, and she has been our Chief Medical Officer since April 2020. She was our Senior Vice President and

Head of Global Clinical Development from May 2019 to October 2019. Prior to joining us, Dr. Bozic spent more than 20

years at Biogen Inc., a biotechnology company focused on neurological diseases, most recently as Senior Vice President of

Global Development and Portfolio Transformation from 2015 to May 2019 and as Senior Vice President of Clinical and

Safety Sciences from 2013 to 2015. Dr. Bozic has served as the industry representative to the FDA’s Risk Communication

Advisory Committee, and was a member of PhRMA’s Clinical and Preclinical Development Committee and the Board of

Managers at BioMotiv. She received her M.D., C.M., completed her residency, and was Chief Resident in Internal Medicine

at McGill University. She completed her fellowship in Pulmonary and Critical Care Medicine at Brigham and Women’s

Hospital and was an Associate Physician at Beth Israel Deaconess Medical Center and Harvard Medical School before

joining the biopharmaceutical industry.

Dr. Bunnage is our Executive Vice President and Chief Scientific Officer, a position he has held since February 2026. He

was our Senior Vice President & Head of Global Research from March 2024 through January 2026, our Senior Vice

President & Head of Research from July 2021 to March 2024, and our Senior Vice President & Site Head, Boston Research,

from August 2016 to July 2021. Prior to joining Vertex, Dr. Bunnage had a 20-year career at Pfizer Inc. where he held

positions of increasing responsibility, including Vice President, Worldwide Medicinal Chemistry and Head of Medicinal

Chemistry, Sandwich Laboratories. Dr. Bunnage is a Fellow of the Royal Society of Chemistry and a Fellow of the Royal

Society of Biology. He also serves as a visiting professor in chemistry at the University of Oxford, United Kingdom, and is a

member of the Strategic Advisory Board for the Department of Chemistry at the University of Durham, United Kingdom. Dr.

Bunnage received his B.Sc in Chemistry from the University of Durham and his D.Phil in Chemistry from the University of

Oxford. He completed his postdoctoral research as a NATO Fellow at The Scripps Research Institute in La Jolla, California.

Mr. McKechnie is our Executive Vice President, Chief Commercial Officer, a position he has held since July 1, 2025.

Mr. McKechnie previously served as our Senior Vice President, Head of North America Commercial from October 2018 to

July 2025, and as our Vice President of Global Marketing from June 2013 to September 2018. Prior to joining Vertex, Mr.

McKechnie held positions of increasing responsibility at Novartis AG, including Vice President, Respiratory Franchise from

January 2013 to June 2013; Vice President and Head Brand Maximization and Established Medicines from April 2012 to

April 2013; and Vice President, Cardiovascular Marketing from November 2008 to March 2012. Before Novartis, Mr.

McKechnie held various roles at GlaxoSmithKline plc. Mr. McKechnie holds a Business & Marketing degree from the

University of Plymouth in England.

Mr. Sachdev is our Executive Vice President, Chief Patient and External Affairs Officer, a role he has held since July

2023. From October 2019 to July 2023, he was our Executive Vice President, Chief Patient Officer. In addition, Mr. In addition, the U. Sachdev

served in the role of Chief of Staff to the CEO from April 2020 to March 2023. He served as our Executive Vice President

and Chief Regulatory Officer from January 2017 until September 2019, and as our Executive Vice President, Policy, Access

and Value from October 2014 through December 2016. In 2010, he established our first international commercial operations

in Canada. In 2007, he joined us as a Senior Vice President, to establish our government affairs and public policy activities,

as well as our patient advocacy programs. Prior to joining us, Mr. Sachdev served as Executive Vice President, Health, of the

Biotechnology Industry Organization (BIO) and was the Deputy Commissioner for Policy at the FDA, where he also served

in several other senior positions. Prior to the FDA, Mr. Sachdev served as Majority Counsel to the Committee on Energy and

Commerce in the U.S. House of Representatives and practiced law at the American Chemistry Council, and subsequently at

the law firm of Ropes & Gray LLP. He served as a member of the Board of Directors of Eiger BioPharmaceuticals from

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April 2019 to September 2024. Mr. Sachdev holds a B.S from Carnegie Mellon University and a J.D. from Emory University

School of Law.

Dr. Tatsis is our Executive Vice President, Chief Regulatory and Quality Officer, a position she has held since August

2020. Previously, she was our Senior Vice President and Chief Regulatory Officer from October 2019 to August 2020, and

our Senior Vice President, Global Regulatory Affairs from September 2017 to October 2019. Prior to joining us, Dr. Tatsis

held positions of increasing responsibility at several pharmaceutical companies, including Sanofi, Stemnion, Pfizer, and

Wyeth. Most recently, from 2014 to 2017, she was Vice President, Head of Global Regulatory Affairs, at the Sanofi

Genzyme Business Unit focused on Inflammation/Immunology, Rare Disease, Multiple Sclerosis, Ophthalmology,

Neurology, and Oncology/Immuno-Oncology. Dr. Tatsis also worked as an associate staff scientist and research fellow in

Immunology and Vaccine Development at the Wistar Institute and completed a post-doctoral research fellowship in

Immunology at Thomas Jefferson University. Dr. Tatsis has served as a member of the board of directors at Odyssey

Therapeutics since October 2025, and previously served on the board of directors of Verve Therapeutics from June 2024 until

July 2025, when it was acquired by Eli Lilly. She received her Ph.D. in Cell and Molecular Biology from the University of

Vermont and holds a B.S. in Biology from Temple University.

Mr. Wagner is our Executive Vice President, Chief Operating & Financial Officer, a position he has held since July

2025. Mr. Wagner was our Executive Vice President, Chief Financial Officer from April 2019 through June 2025. Prior to his

role at Vertex, Mr. Wagner was Chief Financial Officer and Executive Vice President, Finance, of Ortho Clinical

Diagnostics, a Carlyle Group portfolio company, from June 2015 to March 2019. In that role, he led the finance, accounting,

tax, treasury, global financial systems, lender relations, and acquisitions and divestiture groups. From July 2012 to June 2015,

Mr. Wagner served as Executive Vice President, Chief Financial Officer of Bruker Corporation, a scientific instruments

manufacturer. Prior to that, Mr. Wagner served as Chief Financial Officer for Progress Software Corporation, a provider of

enterprise software, and Millipore Corporation, a global provider of products and services in the life science tools market. Mr.

Wagner served as a director of Good Start Genetics, Inc., from April 2014 to August 2017 and served as a director and

member of the Audit Committee of Bruker Corporation from August 2010 to June 2012. He has served as a member of the

Board of Directors of The TJX Companies, Inc., since September 2023. Mr. Wagner holds a B.S. in Accounting from Boston

College and a M.B.A from Harvard Business School.

Ms. Ambrose is our Senior Vice President, Chief Accounting Officer, a position she has held since May 2021. Ms.

Ambrose previously served as our Senior Vice President, Accounting, Tax, Treasury, Strategic Sourcing and Corporate

Services since March 2021. From February 2003 until she joined us, Ms. Ambrose held roles of increasing responsibility at

Boston Scientific Corporation, a medical device company, most recently as Vice President of Finance and Controller of the

Global Endoscopy Division from July 2019 to March 2021 and as Vice President of Global Internal Audit from February

2017 to June 2019. Prior to Boston Scientific Corporation, Ms. Ambrose served as an accountant at Ernst & Young LLP. She

received her B.S. in Commerce from the University of Virginia and is a Certified Public Accountant.

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ITEM 1A. RISK FACTORS

Investing in our common stock involves a high degree of risk, and you should carefully consider the risks and

uncertainties described below in addition to the other information included or incorporated by reference in this Annual

Report on Form 10-K. If any of the following risks or uncertainties occur, our business, financial condition or results of

operations would likely suffer, possibly materially. In that case, the trading price of our common stock could decline.

Risks Related to Our Business and Products

Our success depends on our ability to develop and commercialize additional medicines.

We invest significant resources in research and development to discover and develop transformative medicines for

people with serious diseases. Product development is highly uncertain and expensive. Product candidates may appear

promising in research and development but may fail to reach commercial success for many reasons, including:

•the failure to establish safety and efficacy through clinical trials;

•the failure to obtain marketing approval;

•the inability to manufacture on economically feasible terms;

•the failure to gain and maintain market acceptance among physicians and patients or other members of the medical

community;

•the failure to obtain adequate pricing or reimbursement levels from third-party payors or foreign governments; and

•competition based on, among other factors, safety, efficacy, patient convenience, pricing and reimbursement.

If we are not able to successfully develop and commercialize additional medicines, our business would be materially

harmed.

Our business is substantially dependent on the success of our CF medicines.

Substantially all our net product revenues have been derived from the sale of our CF medicines. We may be unable to

sustain or increase revenues from sales of our CF medicines in the future for any number of reasons, including the potential

introduction of competitive products or the inability to successfully develop and commercialize next-generation medications

or medicines to treat people with CF who cannot benefit from our current CF medicines. Our concentrated source of revenue

increases the risks associated with potential manufacturing or supply disruptions, safety issues that may be identified with

respect to our CF medicines, and failure to gain and/or maintain market acceptance or adequate pricing or reimbursement for

our CF medicines. If we are unable to sustain or increase revenues from sales of our CF medicines, or if we do not meet the

expectations of investors, our business would be materially harmed and our ability to fund our operations could be adversely

affected.

If we are unable to successfully develop and commercialize medicines for acute and neuropathic pain, our business could

be materially harmed.

A portion of the value attributed to our company by investors is based on the expected commercial success of

JOURNAVX for acute pain and on our development programs for both acute and peripheral neuropathic pain. JOURNAVX

may not gain or maintain market acceptance among physicians, patients, or payors due to various factors, including the

availability of lower-cost alternatives, and sales, marketing, pricing, and/or distribution challenges associated with

introducing a product into a highly competitive market. Furthermore, we may not succeed in developing JOURNAVX for

additional indications or in advancing other product candidates, including NaV1.8 or NaV1.7 inhibitors, for the treatment of

acute or peripheral neuropathic pain. Even if we obtain marketing approvals for these product candidates, they will face

significant competition and there can be no assurance of commercial success.

We may not be able to increase or maintain CASGEVY product revenues.

The future commercial success of CASGEVY depends on physicians, patients, or payors accepting it as medically

useful, cost-effective, ethical, safe, and preferred with respect to current and potential future competitive therapies, and on

26

payors providing adequate reimbursement. In addition to risks generally associated with the commercialization of medicines,

the cell collection processes, manufacturing and other procedures required to manufacture and administer CASGEVY are

more complex, resource-intensive, and operationally demanding than for small molecules. For example, the cost of

manufacturing CASGEVY as a percentage of revenue is significantly higher than for our CF medicines. Moreover, market

acceptance continues to be dependent in part on the prevalence and severity of side effects associated with the procedure by

which CASGEVY is administered, including those resulting from the myeloablative preconditioning regime. There can be no

assurance that we will be able to increase or maintain our revenues from CASGEVY in future periods.

Risks Related to Commercialization

We are subject to pricing and reimbursement pressures that could have a material adverse effect on our business,

revenues, and results of operations.

Revenues from our products depend, to a large degree, on the extent to which the products are purchased by customers,

such as wholesalers, pharmacies, and hospitals, and reimbursed by third-party payors, such as government health programs,

commercial insurers, and managed health care organizations. Increasingly, these third-party payors are becoming more

critical in evaluating and reimbursing medicines. The containment of health care costs continues to be a priority for many

governments, and drug pricing has been a focus in this effort. The U.S. federal government and state legislatures and foreign

governments have shown significant and evolving interest in implementing cost-containment programs, including price

controls, restrictions on reimbursement, value-based and reference pricing, compulsory licensing, including the pursuit of so-

called “march in” rights, and mandatory substitution with generic products, all of which could limit the prices of, or access to,

our products. Decisions by third-party payors to not cover a product or restrict access to a product may shift over time and

could reduce market acceptance of the product and limit product revenues. We must also compete to be placed on formularies

of managed care providers, as exclusion of our products from a formulary would limit usage by managed care providers and

patients.

In the U.S., pricing and access is primarily governed by practices of private managed care providers and institutional and

governmental purchasers, federal laws and regulations related to Medicare and Medicaid, including the ACA and the IRA,

and state activities, including the establishment of PDABs and price transparency rules. For example, in August 2023, the

Colorado PDAB selected five drugs for an affordability review, including TRIKAFTA. Although the Colorado PDAB later

found TRIKAFTA to be ineligible for an upper payment limit we cannot predict whether future reviews by the Colorado

PDAB, or any other PDAB, will come to the same conclusion about TRIKAFTA or any of our other therapies, or the amount

of any potential upper payment limit. Furthermore, changes to the health care system enacted as part of health care reform in

the U.S., as well as increased purchasing power of entities that negotiate on behalf of Medicare, Medicaid, and private

payors, could result in further pricing pressures. For example, initiatives by the U.S. government to impose most-favored-

nation pricing on U.S. prescription drug prices in government programs, including the recently proposed GUARD Model by

the CMS. While there is significant uncertainty around the related executive orders and rulemaking, mandatory initiatives

could result in reduced pricing and reimbursement for our products.

In most markets outside of the U.S., the pricing and reimbursement medicines is subject to governmental control and

governments are making greater efforts to reduce drug prices and limit drug spending. The reimbursement process in ex-U.S.

markets vary widely and can take a significant time to complete, and reimbursement decisions are made on a country-by-

country and region-by-region basis. Reimbursement for our products by governments, including the timing of any

reimbursements, may also be affected by budgetary or political constraints, particularly in challenging economic

environments. We have experienced challenges in obtaining timely reimbursement for our products in various countries

outside the U.S., and our future revenues depend on maintaining such reimbursement. There is no assurance that coverage

and reimbursement will continue for our current products or be available for our future products. Even if reimbursement is

available, there is no assurance that the timing or level of reimbursement will be sufficient. Furthermore, many ex-U.S.

governments are introducing new legislation focused on cost containment measures applicable to the pharmaceutical

industry; such legislation, if finalized, could lead to lower prices, rebates or other forms of discounts or special taxes.

Our failure to obtain or maintain adequate prices, coverage, or reimbursement for our products would have an adverse

effect on our business, revenue and results of operations, could curtail or eliminate our ability to adequately fund our research

and development programs and/or could cause a decline or volatility in our stock price.

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Competing products and technological advances from our competitors may negatively affect our business and market

position.

Our products and product candidates face or may face competition from existing and potential competing products. See

also Item 1., Business – Competition of this Annual Report on Form 10-K. Competing products may be more effective, safer,

more effectively marketed, have lower prices or better coverage or reimbursement levels, eliminate or minimize the need for

treatment with our products or product candidates, or have other differentiating factors that negatively affect the demand for

our products or product candidates. If a competitor obtains approval and reimbursement before we do, approval and/or

reimbursement of our products or product candidates could be delayed, denied, or otherwise adversely affected. We compete

with an array of companies and other organizations, including those that have substantially greater resources, more mature

development, manufacturing and commercial organizations, and/or other competitive advantages. Smaller companies with

innovative programs or technologies are frequently acquired by and enter into collaborations with larger competitors, which

may result in the acceleration or enhancement of competitive programs. We cannot predict the timing or impact of the

introduction of competitive products. If a competing product is successfully developed and commercialized for a patient

population we are currently treating or are seeking to treat, our revenues, business or market position could be materially

adversely affected. In addition, the release of new information, including clinical data and regulatory approval timelines, by

our competitors regarding competitive products or potentially competitive product candidates can affect investors’

perceptions regarding the prospects of our products and product candidates, and has caused and may in the future cause our

stock price to decline or experience periods of significant volatility.

If we discover safety or efficacy issues with any of our products, commercialization efforts for the product could be

negatively affected, the approved product could lose its approval, and our business could be materially harmed.

After regulatory approval and launch, our products are used over longer periods of time and by larger populations of

patients than during pre-approval clinical trials. Additional clinical and non-clinical studies, such as for label expansions, new

combinations or otherwise, may also be conducted after regulatory approval. For example, as part of FDA approval for

CASGEVY, we are required to conduct post-marketing safety studies to assess certain long-term risks associated with the

treatment. Additionally, when post-marketing studies involve our marketed products, or an active pharmaceutical ingredient

thereof, they can raise new safety issues for our existing products. The subsequent discovery or appearance of previously

unknown or underestimated safety or efficacy concerns with a product could negatively affect commercial sales of the

product, result in reduced coverage or reimbursement by payors, cause reputational harm, government investigations, and/or

lawsuits against us. Subsequent adverse safety events, as well as safety or efficacy issues affecting suppliers or competing

products, may also lead to recalls, denial or withdrawal of regulatory approvals, non-renewal of conditional regulatory

approvals, label changes, obligations to conduct additional or more extensive clinical trials or to implement a risk

management plan, and reductions in market acceptance. Each of our CF products shares at least one active pharmaceutical

ingredient with another of our products. If any of our CF products were to experience safety issues or labeling modifications,

our other CF products may be adversely affected. For example, in December 2024, the FDA required us to modify the

TRIKAFTA label by revising information regarding liver injury and liver failure and moving that information from the

“warnings and precautions” section to a “boxed warning” section; the FDA required similar language in the ALYFTREK

label. In addition, safety or efficacy issues affecting suppliers’ or competitors’ products also may reduce the market

acceptance of our products.

The discovery of safety events involving our products or public speculation about such events could limit or reduce

product revenues and cause our stock price to decline or experience periods of volatility.

Risks Related to Product Development

The data from our product development activities may not support advancement or regulatory approval of our product

candidates, or label expansions for our marketed products, or provide sufficient data to support the successful

commercialization of our approved products.

Extensive testing is required for our product candidates and for new indications of our marketed products. The outcomes

of such clinical and non-clinical testing are highly uncertain, may not generate sufficient safety, efficacy, or other data, and

may not support regulatory approval of our product candidates. Clinical and non-clinical testing, and in particular our later-

stage clinical trials, are expensive and resource intensive. The data from our preclinical studies and other research activities

have in the past and may in the future fail to predict results in clinical trials. For example, despite considerable non-clinical

testing, the clinical study of VX-264 in T1D did not meet its efficacy endpoint. Similarly, results from earlier-stage clinical

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trials may not be predictive of the results from later-stage clinical trials, or of the likelihood of approval of a product

candidate for commercial sale. In addition, interim or preliminary data from a clinical trial may not be predictive of final

results from the clinical trial and are subject to the risk that one or more of the clinical outcomes may materially change as

patient enrollment and treatment continues, more patient data become available, or as patients continue other treatments for

their disease.

The data from our clinical programs may not support approval or successful commercialization of our product

candidates, and we may be unable to recoup the significant research and development, clinical trial, acquisition-related, and

other expenses incurred, which could have an adverse effect on our business, financial condition and results of operations,

and/or cause our stock price to decline or experience periods of volatility.

In addition, results of our clinical trials and findings from nonclinical studies could lead to abrupt changes in our

development activities, including the possible cessation of development activities associated with a particular product

candidate or program. For example, after VX-264 did not meet its efficacy endpoint, we announced that the program would

not advance into further clinical studies. Failure to advance product candidates through clinical development would impair

our ability to commercialize products, which could materially harm our business, financial condition and long-term prospects.

Our research and development activities are highly regulated, and it is possible that the FDA and other regulatory

authorities:

•pause or halt our clinical trials based on their assessment of the potential or actual risks of continuing;

•disagree with our conclusions about the results from our clinical trials;

•require additional clinical trials, including confirmatory trials, or disagree with our clinical trial design or endpoint;

•fail to approve the facilities or processes used to manufacture a product candidate, or our dosing or delivery

methods;

•grant marketing approval that is more restricted than anticipated, including limiting indications to narrow patient

populations and imposing safety monitoring requirements, or risk evaluation and mitigation strategies;

•withdraw approval of a product or indication, including when the product or indication was approved under an

accelerated approval pathway and confirmatory studies were unsuccessful.

Furthermore, we periodically release new information, including clinical data, regarding our products and product

candidates, which may affect investors’ perceptions regarding our products and product candidates, and cause our stock price

to decline or experience periods of significant volatility. For example, our stock price decreased in August 2025 after we

released Phase 2 data for VX-993 and informed investors that the FDA did not see a path toward a broad peripheral

neuropathic pain label for suzetrigine at that time. The timing of the release of information by us regarding our product

development programs is often beyond our control and is influenced by the timing of receipt of communications from

regulators and data from our clinical trials, among other things.

If we fail to successfully conduct our clinical activities, our clinical trials or future regulatory approvals may be delayed or

denied.

Conducting clinical trials is a complex, lengthy and expensive process. Our ability to complete clinical trials on our

anticipated timelines depends on numerous factors, including proper and efficient protocol design, regulatory and institutional

review board approval, adequate patient enrollment and retention rates, and compliance with current good clinical practices.

Delays or complications in clinical trials may arise from difficulties in enrolling or retaining patients, competition from other

clinical trials, the occurrence of significant and/or unexpected adverse safety events, changes in regulatory requirements,

supply chain issues or disruptions at clinical trial sites. Further, we may face additional challenges identifying and enrolling

sufficient patients for clinical trials for rare diseases and cell and gene therapies due to small patient populations. With respect

to cell and genetic therapies there may be additional concerns regarding the safety of these more novel therapeutic approaches

to the treatment of these diseases. If we or our third-party clinical trial providers, including contract research organizations

(“CROs”), do not successfully conduct and manage our clinical activities or adequately comply with regulatory requirements,

our clinical trials may experience delays or increased costs, and the potential regulatory approval of a product candidate or

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expansion of a label for a marketed product may be delayed or denied. Any delay in obtaining required regulatory approvals

could adversely affect our ability to successfully commercialize a product candidate.

Regulatory, Intellectual Property and Other Legal Risks

The extensive regulatory framework governing the health care industry could adversely affect our ability to obtain

approval and market our medicines and failure to comply with these regulations could result in fines, penalties or other

non-monetary remedies.

The health care industry is highly regulated and subject to complex and increasing regulations. U.S. federal and state

regulators, including the FDA and comparable ex-U.S. regulators directly regulate our most critical business activities,

including those related to research, development, manufacturing, and commercialization, as described in Item 1, “Business –

Government Regulation.”

The process for obtaining regulatory approvals to market a product is costly and time consuming, and approvals may not

be granted for future products, or additional indications of existing products, on a timely basis or at all. In addition, we cannot

guarantee that we will remain compliant with applicable regulatory requirements once approval has been obtained. These

requirements govern, among other things, our manufacturing practices, communications regarding our products, and

reporting of safety events. Maintaining compliance with these extensive regulations is complex, expensive, and time

consuming, and failure to comply may result in additional regulatory actions, including recalls, withdrawal or suspension of

product approvals, civil and criminal charges, reputational harm, and fines, penalties, or other monetary or non-monetary

remedies, including exclusion from receipt of payment from U.S. federal and state healthcare programs like Medicare and

Medicaid. Compliance with the regulatory requirements for biologics and cell and gene therapies can be more burdensome,

expensive and time-consuming than for other, better known or more extensively studied types of medicines, such as small

molecules. Regulatory requirements governing cell and genetic therapy products have changed frequently and may continue

to change in the future. Furthermore, risks relating to compliance with laws and regulations may be heightened as we

continue to expand our global operations and enter new therapeutic areas with different patient populations, which may

require different commercialization activities from those we currently utilize.

We expect that regulation of the healthcare industry will continue to evolve through political and legal action, as future

proposals to reform healthcare systems are considered by U.S. and foreign governments and regulatory authorities. We

cannot predict when additional changes in the healthcare industry in general, or the pharmaceutical industry in particular, will

occur, or what the impact of such changes may be. For example, new proposals or requirements regarding local

manufacturing of pharmaceutical products, enhanced data security and privacy measures, sustainability, importation

restrictions, embargoes, or trade sanctions may negatively impact our business. In addition, our development and

commercialization activities could be harmed or delayed by a shutdown of the U.S. government or events that affect the

manner in which the FDA operates.

Commercialization of our products requires that we operate in compliance with applicable health care laws, including

laws regulating promotional activities, prohibiting fraud and abuse and requiring reporting of government pricing

information.

We market our products to health care providers and provide promotional materials and informational programs

regarding the use of each product in these patient populations. In jurisdictions where permitted, we also market our products

to patients for whom the applicable product has been approved, as well as to their caregivers. If a regulatory authority

interprets any of our conduct, including our marketing practices or patient support programs, as promotion of unapproved

uses or otherwise false and misleading, it could request that we modify or withdraw our promotional materials or issue

corrective advertising. It could also take enforcement action, such as issuing warning or untitled letters, prohibiting certain of

our activities, seizing products, and imposing civil fines and criminal penalties. It is also possible that other federal, state, or

foreign enforcement authorities might take action if they believe that the alleged conduct led to the submission and payment

of claims for unapproved uses of our product, which could result in significant fines or penalties. Even if it is later determined

we were not in violation of these laws, we may be faced with negative publicity, incur significant expenses defending our

actions, and have to divert significant management resources from other matters.

Our interactions with health care providers that prescribe or purchase our products are also subject to laws and

regulations designed to prevent fraud and abuse in the sale and use of medicines and that place significant restrictions on the

marketing practices of biopharmaceutical companies. The relationships between companies and health care providers are

30

scrutinized and have been the target of lawsuits and investigations alleging various problematic conduct, including

submission of incorrect pricing information, improper promotion of pharmaceutical products, payments intended to influence

the referral of health care business, submission of false claims for government reimbursement, and anticompetitive behavior.

We are required to track and disclose financial interactions with health care providers and health care organizations, which

may increase government and public scrutiny of these financial interactions. Failure to comply with these reporting

requirements could result in significant civil monetary penalties. As we commercialize products for new patient populations

and in new geographies, we will have more interactions with a broader set of healthcare providers and we must continue to

expend significant efforts to establish, maintain and enhance systems and processes to comply with laws and regulations

governing those interactions.

Government price reporting and payment regulations are also complex, requiring us to continually assess the methods by

which we calculate and report pricing in accordance with these obligations. Our methodologies for calculations are inherently

subject to assumptions and may be subject to review and challenge by various government agencies, which may disagree

with our interpretation. If the government disagrees with our reported calculations, we may need to restate previously

reported data and could be subject to additional financial and legal liability.

If we are unable to obtain, maintain and enforce our intellectual property rights, our business could be harmed.

Our success depends, in significant part, on our ability to obtain, maintain, and enforce patents and intellectual property

rights such as trademarks and copyrights that protect our products, product candidates, and technologies. In addition, we rely

upon trade secret protection and contractual arrangements to protect certain of our proprietary information. Due to the

complexity of the legal standards and factual questions relating to the patentability, validity, and enforceability of patents

covering pharmaceutical and biotechnological inventions and the scope of claims made under these patents, our ability to

obtain, maintain and enforce our patents is uncertain. The initial grant of patents or regulatory exclusivity in the U.S. and ex-

U.S. markets depends upon decisions of the patent offices, courts, and governments in those countries. We may fail to obtain,

defend or otherwise preserve patent and other intellectual property rights, including certain forms of regulatory exclusivity,

and our current intellectual property rights or protections and those we obtain in the future may not be broad enough or

sufficient to protect our commercial interests in all countries where we conduct business.

In the U.S. and ex-U.S. markets, third parties have challenged and may continue to challenge, invalidate, or circumvent

our patents and patent applications relating to our products, product candidates, and technologies. We have had and may

continue to have disputes with respect to the rights to products, product candidates, and technologies developed in

collaboration with other parties. If we cannot resolve disputes and obtain adequate intellectual property right protections, we

may not be able to develop or market our products. Settlements of such proceedings could also result in reducing the period

of exclusivity and other protections, resulting in a reduction in revenue from affected products. Any litigation, including

litigation related to Abbreviated New Drug Applications (“ANDA”), litigation related to 505(b)(2) applications, interference

proceedings to determine priority of inventions, derivations proceedings, inter partes review, oppositions to patents in foreign

countries, litigation against our collaborators, or similar actions, could harm our business.

Difficulties in, or preclusion from, protecting our intellectual property rights in foreign jurisdictions could substantially

harm our business. Third-party manufacturers may be able to sell generic versions of our products in countries that do not

provide effective mechanisms for enforcement of our patents or other intellectual property rights. For example, we have

experienced a violation of our intellectual property rights in Russia, where a copy product that infringes our patents has been

made available. In addition, many foreign countries have compulsory licensing laws under which a patent owner must grant

licenses to third parties in certain circumstances. Compulsory licenses have been used in certain countries for market access

purposes and, in some cases, as a cost-containment measure. Compulsory licenses issued for our patents may diminish or

reduce revenue from those jurisdictions and negatively affect our results of operations. Third parties may also illegally

distribute and sell counterfeit versions of our products. Copy or counterfeit products may not meet our rigorous

manufacturing and testing standards and a patient who receives such product may be at risk for a number of dangerous health

consequences. Our business and reputation could suffer harm as a result of illegally produced and distributed generic versions

of our products, as well as counterfeit products sold under our brand name. The diversion of products from their authorized

market into other channels may result in reduced revenues and negatively affect our profitability.

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If we are not able to operate without infringing upon intellectual property rights of third parties, our business could be

harmed.

Our competitors seek to protect their products, product candidates and proprietary information through patents,

trademarks, trade secrets, and copyrights. Third parties have claimed and may claim in the future that our products or other

activities infringe their intellectual property rights or that our employees have misappropriated their intellectual property

rights. See also Item 1., Business – Intellectual Property of this Annual Report on Form 10-K. Resolving an intellectual

property infringement or other claim can be costly and time consuming and may require us to enter into license agreements,

which may not be available on commercially reasonable terms. A successful claim of patent infringement or other violation

or misappropriation of intellectual property rights by a third party could subject us to significant damages and/or an

injunction preventing the manufacture, sale, or use of the affected product or products, and/or require us to pay royalties or

redesign our infringing products, which may be impossible or require substantial time and monetary expenditure.

Our business has a substantial risk of product liability claims and other litigation liability.

The testing, manufacturing, marketing and use of our products and product candidates involve substantial risk of product

liability claims. These claims may be made directly by consumers, patients, healthcare providers, or others. Product liability

claims and lawsuits and safety alerts or product recalls, regardless of their ultimate outcome, may decrease demand for our

products or any product candidate for which we obtain marketing approval, and may have a material adverse effect on our

business, results of operations, reputation, and our ability to market our products. Our product liability and clinical trial

insurance may not provide adequate coverage against all potential liabilities.

There continues to be a significant volume of government and regulatory investigations and litigation against companies

operating in our industry, as well as robust regulatory enforcement and whistleblower claims. Investigations into aspects of

our business include inquiries, subpoenas, and other types of information demands from government and regulatory

authorities. We are also involved in and are subject to other various legal proceedings, including litigation, and other dispute-

related proceedings. These activities require significant financial and internal resources. This includes the arbitration initiated

by the third party to whom the CFF has assigned its ALYFTREK royalty rights. Please see Item 7. Management’s Discussion

and Analysis of Financial Condition and Results of Operations of this Annual Report on Form 10-K for more information.

The outcome of such legal proceedings, investigations or any other dispute-related proceedings are inherently uncertain and

adverse developments or outcomes can result in significant expenses, monetary damages, penalties, injunctions, or other

relief against us, and in the ALYFTREK arbitration, could result in higher future costs of goods if royalty fees are higher than

anticipated. For a description of our litigation, investigation and other dispute-related matters, see Note P., Commitments and

Contingencies — Legal Matters and Other Contingencies, included in this Annual Report on Form 10-K.

We are subject to various and evolving laws and regulations governing the privacy and security of personal data.

We are subject to a variety of evolving and developing data privacy and security laws and regulations in various

jurisdictions related to the collection, storage, use, sharing, and security of personal data, including health information.

Regulators globally are imposing data privacy and security requirements, such as the E.U.’s GDPR and other domestic data

privacy and security laws, such as the California Consumer Privacy Act and the California Privacy Rights Act. These and

other similar types of laws and regulations that have been or may be passed often include requirements with respect to

personal information. Compliance with privacy laws and regulations is a rigorous and time-intensive process that may

increase our cost of doing business or require us to change our business practices. Failure to comply may result in liability

through government enforcement, private actions, civil and criminal fines and penalties, litigation, and reputational harm.

Although we are not directly subject to HIPAA, we could face penalties, including criminal liability, for knowingly obtaining

or disclosing protected health information from non-compliant HIPAA-covered entities. The commercialization of cell and

genetic therapies involves processing more personal data than traditional therapies, increasing our risk exposure.

Furthermore, the number of government investigations, enforcement actions, and class action lawsuits related to data security

incidents and privacy violations, particularly focused on online data sharing, continue to increase. Government investigations

typically require significant resources and generate negative publicity, which could harm our business and reputation.

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Risks Related to Our Operations

We may face manufacturing, supply, and distribution delays, difficulties, and disruptions, among other challenges,

including at our third-party providers.

We could be subject to significant supply interruptions for our commercial products or product candidates as a result of

disruptions to our internal manufacturing capabilities or those of our suppliers or partners. Supply disruptions may result from

a variety of factors, including shortages in product raw materials or labor, technical difficulties, regulatory inspections or

restrictions, delays in construction, regulatory approval, and inspection of new facilities or the expansion of existing facilities,

shipping or customs delays, inability to maintain compliance with quality or other regulations, including cGMP requirements,

general global supply chain disruptions, and performance failures by us or any third-party manufacturer on which we rely.

Disruption in our supply chain or manufacturing capabilities can result in shipment delays, inventory shortages, lot failures,

product withdrawals, recalls and other interruptions in the commercial and clinical supply of our products and product

candidates. Any such disruption with respect to our commercial products could result in a failure to meet market demand,

could negatively affect our patients, could reduce our net product revenues and/or increase our costs. Any such disruption in

the supply of product candidates to our clinical trials could negatively affect the subjects enrolled in our clinical trials and/or

cause delays in our clinical trials and applications for regulatory approval.

Additionally, unfavorable geopolitical events could affect our ability to interact with or conduct business with specific

vendors within our global supply network or could prevent or delay the transportation of supplies or products to their planned

destination. For example, we depend on China-based suppliers for portions of our supply chain. Finding alternative suppliers

due to geopolitical developments or otherwise may not be feasible or could take a significant amount of time and involve

significant expense due to the nature of our products and the need to obtain regulatory approvals.

If we are unable to maintain and expand our supply chain and manufacturing capabilities, our ability to develop our

product candidates and manufacture our products would be harmed.

We continue to invest in and expand our manufacturing capabilities and supplier relationships to ensure the stability of

our supply chains and to support the anticipated demand for our products. Establishing, managing and expanding our global

manufacturing capabilities and supply chain, particularly as we enter new therapeutic modalities, requires significant

financial commitment. This includes the creation and maintenance of numerous third-party contractual relationships upon

which we rely. There can be no assurance that we will be able to identify, establish and maintain additional manufacturers or

capacity for our product candidates and products on a timely basis, on commercially reasonable terms, or at all. The

foregoing risks may be heightened where our products and the materials that we utilize in our operations are manufactured by

only one supplier or at only one facility. In addition, in the course of providing its services, a contract manufacturer may

develop process technology related to the manufacture of our products or product candidates that the manufacturer owns,

either independently or jointly with us. This would increase our reliance on that manufacturer or require us to obtain a license

from that manufacturer to have our products or product candidates manufactured by other suppliers utilizing the same

process.

In addition, we and our CMOs and corporate partners are subject to cGMP, as well as comparable regulations in other

jurisdictions. Manufacturing operations are also subject to routine inspections by regulatory agencies. Even after a supplier is

qualified by the regulatory authority, the supplier must continue to expend time, money and effort in the area of production

and quality control to maintain full compliance with applicable regulatory requirements, including cGMP. If, as a result of

these inspections, a regulatory authority determines that the equipment, facilities, laboratories or processes do not comply

with applicable regulations and conditions of product approval, the regulatory authority may suspend the manufacturing

operations. There can be no assurance that we or our CMOs and corporate partners will be able to remedy any deficiencies

cited by FDA or other regulatory agencies in their inspections.

Furthermore, the manufacturing and logistics for drug products are highly complex and can require significant

investment, including to scale-up manufacturing processes and to secure capacity at third parties with expertise to meet our

requirements. This capacity may be limited by the number of other clinical trials and commercial manufacturing ongoing for

other companies seeking similar support. There are many risks that could result in delays and additional costs, including the

need to hire and train qualified employees and obtain access to necessary equipment and third-party technology. Additionally,

even with relevant experience and expertise, drug manufacturers often encounter difficulties in scale-up and production,

including difficulties with production costs and yields, quality control, and compliance with federal, state and foreign

33

regulations, which can prevent manufacturers from completing clinical trials or commercializing products on a timely or

profitable basis, if at all.

Reliance on third-party relationships could adversely affect our business.

Our business depends on relationships with third parties, including activities critical to research, development,

manufacturing, commercialization, and technology. For example, we rely on third parties such as CROs for the day-to-day

management and oversight of our clinical trials, on CMOs for active ingredient manufacturing and finishing operations, and

on logistics providers for the distribution of our products. We are expanding our relationships with CROs, CMOs, and other

third parties as we enter markets in which we have no or limited experience. Failure by any of our third parties to meet their

contractual, regulatory, or other obligations, any disruption in the relationship between Vertex and a third party upon whom

we rely, or the failure of a third party to conduct activities in accordance with our expectations, could adversely affect the

relevant research, development, manufacturing, commercial, or administrative activity and our business. The foregoing risks

may be heightened as a result of the limited number or specialized nature of certain third parties, as we may not be able to

replace such third party in a timely manner, on commercially reasonable terms, or at all.

The third parties upon which we rely are subject to their own operational and financial risks, as well as other difficulties,

which, if realized, could negatively affect our business. If any of our third parties violate, or are alleged to have violated, any

laws or regulations, including anti-corruption or anti-bribery regulations, the GDPR, or other laws and regulations, during the

performance of their obligations to us, we could suffer financial and reputational harm or other negative outcomes, including

possible legal consequences.

If we fail to scale our operations to accommodate growth, our business may suffer.

As we continue to expand our global operations and capabilities, we face increasing demands on our management and

infrastructure. To effectively manage our growing business, we need to:

•implement and clearly communicate corporate-wide strategies and effectively prioritize resources;

•enhance our operational and financial infrastructure, including data and information controls;

•effectively leverage technology and automation where appropriate to enable efficient growth and remain

competitive;

•improve our administrative, financial and management processes, including decision-making processes and budget

prioritization;

•effectively grow, train and manage our global employee base; and

•expand our compliance and legal resources.

A variety of risks associated with operating in foreign countries could materially adversely affect our business.

Our global operations subject us to risks that could adversely affect our business and revenue. In addition to the ex-U.S.

risks we face with respect to compliance with local laws and regulatory requirements, pricing and reimbursement, intellectual

property, manufacturing capabilities and supply chain, foreign exchange risks, and reliance on third parties, risks associated

with operating a global biotechnology company include the potential for:

•economic weakness, including recession and inflation, or political instability globally or with respect to particular

foreign economies and markets;

•business interruptions resulting from geo-political actions, including war and terrorism;

•import and export licensing requirements, tariffs, trade barriers, and other trade and travel restrictions, the risks of

which appear to have increased in the current political environment;

•credit risks related to our customers, which may be higher in less developed markets; and

•global or regional public health emergencies.

34

If any of the above risks were to occur, our revenues, results of operations, financial condition or business could be

materially harmed.

Current or future U.S. legislation, including executive orders, or other new changes in laws, regulations or policies in the

U.S. or other countries could negatively impact our business by increasing costs, decreasing demand for our products, and

increasing government cost controls, among other risks. For example, U.S. legislation has been introduced to limit certain

U.S. biotechnology companies from using equipment or services from select Chinese biotechnology companies, and others in

Congress have advocated for limitations on those Chinese service providers’ ability to engage in business in the U.S. We

cannot predict what actions may ultimately be taken with respect to trade relations between the United States and China or

other countries, what products and services may be subject to such actions, the effective date or duration of such actions, or

what actions may be taken by the other countries in response to actions by the United States. If we are unable to obtain or use

services from existing service providers or become unable to export or sell our products to any of our customers or service

providers, our business could be materially and adversely affected.

A breakdown or breach of our information technology systems, or unauthorized access to confidential information could

adversely affect our business.

We maintain and rely extensively on information technology systems and network infrastructures, internally and with

third parties for the effective operation of our business. We collect, store, and transmit confidential information, including

personal information, financial information and intellectual property. Disruption, infiltration, or failure of our information

technology systems because of software or hardware malfunctions, computer viruses, cyber-attacks, employee theft or

misuse, power disruptions, natural disasters or accidents could cause breaches of data security and/or loss of critical data,

which in turn could materially adversely affect our business.

Cyber-attacks and incidents are increasing in their frequency, sophistication, and intensity, and are difficult to detect.Cyber-attacks are increasing in their frequency, sophistication, and intensity, and are becoming increasingly difficult to detect.

Cyber-attacks are carried out by well-resourced groups and individuals with a wide range of motives and expertise. Due to

the nature of some cyber-attacks and incidents, there is a risk that they may remain undetected for a period of time. Recent

developments in the threat landscape include the use of adversarial artificial intelligence techniques and machine learning, as

well as an increased number of cyber extortion attacks with higher financial ransom demand amounts and increasing

sophistication and variety of ransomware techniques. Cyber-attacks and incidents also include manufacturing, hardware or

software supply chain attacks, which could cause disruption to or a delay in the manufacturing of our products or product

candidates, or lead to data privacy or security breach. We use cloud technologies and any failure by cloud or other technology

service providers to adequately safeguard their systems and prevent cyber-attacks or data privacy incidents could disrupt our

operations and result in misappropriation, corruption, or loss of confidential or proprietary information. The third parties

upon which we rely face similar risks and when they experience a security breach of their systems, our security can be

adversely affected.

Like many companies, we have experienced immaterial cybersecurity incidents, including temporary service

interruptions of third-party suppliers. There can be no assurance that our efforts to protect our data and information systems

will prevent breakdowns or breaches in our systems that could adversely affect our business. While we maintain cyber

liability insurance, this insurance may not be sufficient to cover the financial, legal, business or reputational losses that may

result from an interruption or breach of our systems and those of critical third parties. Cybersecurity incidents can cause the

loss of critical or sensitive information, including personal information, and could give rise to legal liability and regulatory

action under data protection and privacy laws.

In addition, we face certain risks as we seek to leverage artificial intelligence to optimize productivity and efficiency in

various aspects of the organization. Flaws, biases, or malfunctions in these systems could lead to operational disruptions, data

loss, or erroneous decision-making, impacting our operations, financial condition, and reputation. Ethical and legal

challenges may arise, including biases or discrimination in generated outcomes, non-compliance with data protection

regulations and laws specifically governing the use of artificial intelligence systems and tools, and lack of transparency.

Furthermore, the deployment of artificial intelligence systems could expose us to increased cybersecurity threats, such as data

breaches and unauthorized access. We also face competitive risks if we do not implement artificial intelligence or other

machine learning technologies in a timely fashion.

35

Our operations may be disrupted by the occurrence of a natural disaster, catastrophic event, or by other serious accidents

occurring at our facilities.

Most of our operations, including our research and development activities, are conducted in a limited number of

facilities. If any of our major facilities were to experience a catastrophic loss due to an earthquake, flood, severe storms, fire

or similar event, our operations would be seriously harmed. For example, our corporate headquarters, as well as additional

leased space that we use for certain logistical and laboratory operations and manufacturing, are located in a flood zone along

the Massachusetts coast. If we are unable to effectively implement our business continuity plans, we may experience delays

in recovery of data and/or an inability to perform vital corporate functions, which could result in a significant disruption in

our operations, large expenses to repair or replace the facility and/or the loss of critical data. Additionally, we use hazardous

materials in some of our facilities, and any accident, injury or other loss related thereto could result in substantial liability.

Our property or other relevant insurance may not be sufficient to cover all potential losses that may result from an

interruption to our operations or damage resulting from these risks.

Strategic and Financial Risks

Our business development strategy, including strategic transactions and collaborations, may not be successful, and there

may be delays or failures in realizing the anticipated benefits of these activities.

As part of our business strategy, we seek to enter into strategic transactions to acquire, license, or collaborate with other

entities, in each case that have potential to complement and advance our ongoing research, development, manufacturing, and

commercialization efforts. Over the last several years we have engaged in a number of strategic transactions and

collaborations, including our acquisition of Alpine and its lead asset, povetacicept, as well as several smaller transactions and

collaboration arrangements. See also Item 1., Business – Strategic Transactions of this Annual Report on Form 10-K. Our

future transactions and collaborations may be similar to prior transactions, may be structured differently from prior

transactions, or may involve larger transactions or later-stage assets. We face significant competition for potential strategic

transactions and collaborations from a variety of other companies, some of which have significantly more financial resources

and experience in business development activities. We may not complete future transactions in a timely manner, or at all,

including due to the possibility that a governmental entity or regulatory body may delay or refuse to grant approval for the

consummation of the transaction.

We may not realize the anticipated benefits of our completed or future strategic transactions. The product candidates or

products contemplated by those transactions may be delayed or terminated at any point during research or clinical

development. Even if a product is approved, we may not be able to successfully commercialize it. As a result, we may fail to

generate expected revenue growth or income contribution within the anticipated timeframe or at all. We also face risks that

we:

•may not effectively integrate acquired assets or businesses into our ongoing business;

•may incur additional expenses or fail to achieve anticipated cost savings related to the strategic transactions;

•may incur impairment charges related to assets acquired in any such transactions; or

•may acquire unanticipated liabilities.

In addition, future strategic transactions could result in potentially dilutive issuances of equity securities or the incurrence

of debt.

We continue to collaborate with outside partners on research, development, manufacturing, and/or commercialization

activities with respect to product candidates and products. We face the same research, development, manufacturing, and

commercialization risks with respect to product candidates and products that are subject to collaborations as with product

candidates and products that we have developed ourselves. We face additional risks in connection with our current and future

collaborative arrangements, including with respect to the performance of the collaborator and their compliance with

contractual obligations.

36

Our effective tax rate fluctuates, and changes in tax laws, regulations and treaties, unfavorable resolution to the tax

positions we have taken, and exposure to additional income tax liabilities could have a material impact on our future

taxable income.

Our effective tax rate is derived from a combination of applicable tax rates in the various places that we operate globally.

Our effective tax rate may be different than experienced in the past due to numerous factors, including:

•changes in the mix of our profitability from country to country;

•tax authority examinations/audits of our tax filings;

•adjustments to the value of our uncertain tax positions;

•changes in accounting for income taxes; and

•changes in tax laws or modifications of treaties in various jurisdictions.

Any of these factors could cause us to experience an effective tax rate that is significantly different from previous periods

or our current expectations. For example, actions taken with respect to tax-related matters by associations such as the

Organisation for Economic Co-operation and Development and the European Commission could influence tax laws in

jurisdictions in which we operate, such as the enactments by both E.U. and non-E.U. member countries of a global minimum

tax. We are subject to ongoing tax audits in various jurisdictions, and local tax authorities may disagree with certain positions

we have taken and assess additional taxes. We regularly assess the probable outcomes of these audits to determine the

appropriateness of our tax provision, and we have established contingency reserves for material tax exposures. However,

there can be no assurance that we will accurately predict the outcomes of these disputes or other tax audits or that issues

raised by tax authorities will be resolved at a financial cost that does not exceed our related reserves and the actual outcomes

of these disputes and other tax audits could have a material impact on our results of operations or financial condition.

Changes in foreign currency rates, interest rate risks, the value of our investment portfolio, and inflation affect our results

of operations and financial condition.

Fluctuations in currency exchange rates and interest rates, changes in the value of our investment portfolio, and inflation

have affected and will continue to affect our cash flows, results of operations, and financial condition. The exchange rates

among our reporting currency, the U.S. dollar, and the currencies in which we do business are volatile and our efforts to

mitigate against these risks may not be successful. We invest our available cash in a range of investments, including

investments in cash equivalents and debt securities, and fluctuations in interest rates, among other factors, could materially

negatively affect the value of this investment portfolio. In addition, systemic economic downturns, as well as inflationary

pressures, such as those observed in recent periods, may adversely impact our business and financial results. See also Item

7A., Quantitative and Qualitative Disclosures About Market Risk of this Annual Report on Form 10-K.

Future indebtedness could materially and adversely affect our financial condition, and the terms of our credit agreements

impose restrictions on our business.

If we borrow under our current credit agreement or any future credit agreements, or otherwise issue or incur additional

debt, such indebtedness could have important consequences to our business. The credit agreement requires that we comply

with certain financial covenants, including a consolidated leverage ratio covenant and negative covenants, restricting or

limiting our ability and the ability of our subsidiaries to, among other things, incur additional indebtedness, grant liens,

engage in certain investment, acquisition and disposition transactions, and enter into transactions with affiliates. As a result,

we may be restricted from engaging in business activities that may otherwise improve our business. Failure to comply with

the covenants could result in an event of default that could trigger acceleration of our indebtedness. If we incur additional

indebtedness, the risks related to our business and our ability to service or repay our indebtedness would increase.

There can be no assurance that we will repurchase shares of common stock or that we will repurchase shares at favorable

prices.

In May 2025, our Board of Directors approved a share repurchase program pursuant to which we are authorized to

repurchase up to $4.0 billion of our common stock from time to time through open market or privately negotiated

transactions, of which $618.5 million has been repurchased as of December 31, 2025. Our stock repurchases will depend

37

upon, among other factors, market conditions, our cash balances and potential future capital requirements, results of

operations, financial condition, and other factors that we may deem relevant. We can provide no assurance that we will

repurchase stock at favorable prices, if at all.

General Risk Factors

Our stock price is volatile.

Our stock price is subject to significant fluctuations. From January 1, 2025 to December 31, 2025, our common stock

traded between $362.50 and $519.68 per share. Our future stock price could be significantly and adversely affected by:

•announcements or investor analyst commentary regarding the clinical development of our product candidates as new

information, including efficacy and safety information becomes available;

•our financial guidance and/or financial results, including quarterly and annual fluctuations resulting from factors

such as the timing and amount of our revenues and expenses; and

•other factors including the risks described in these “Risk Factors.”

Fluctuations in our stock price can result in substantial losses for shareholders. Following periods of volatility in the

market price of a company’s securities, shareholder derivative lawsuits and securities class action litigation are common.

Such litigation, if instituted against us or our officers and directors, could result in substantial costs and other harm to our

business.

If we fail to attract and retain skilled employees, our business could be materially harmed.

We must attract and retain highly qualified and trained scientists, as well as employees with experience in the

development, manufacture, and commercialization of medicines, including biologic and cell and genetic therapies. We face

intense competition for such talent from our competitors, other companies, academic institutions, and other organizations

throughout our industry, especially with respect to employees with expertise in cell or genetic therapies. Our compensation

program, including equity awards, may not be sufficient to retain employees, especially if our stock price declines or other

employers offer more attractive opportunities. Our ability to commercialize our products and achieve our research and

development objectives depends on our ability to respond effectively to these demands. If we are unable to hire and retain

qualified personnel, our ability to advance our pipeline, commercialize our products, and achieve our business objectives

could be materially adversely affected.

The use of social media platforms presents risks and challenges.The use of social media platforms and artificial intelligence tools presents risks and challenges.

Social media is increasingly used by patients, advocacy groups, and other third parties to discuss our products and

product candidates. Social media posts may include statements about efficacy or adverse events that could create reporting

obligations or regulatory scrutiny. Our employees’ use of social media also presents risks, including potential noncompliance

with legal or regulatory requirements, inappropriate disclosure of confidential information or personal information, and loss

of intellectual property. In addition, misinformation, negative sentiment, or impersonation of our business on social media

could cause reputational damage or otherwise harm our business. Failure to appropriately manage these risks could result in

regulatory actions, liability, or other adverse consequences.

We have adopted provisions in our articles of organization and by-laws and are subject to Massachusetts corporate laws

that may frustrate any attempt to remove or replace members of our board or to effectuate certain types of business

combinations involving us.

Provisions of our articles of organization, by-laws and Massachusetts state laws may frustrate any attempt to remove or

replace members of our current Board of Directors and may discourage certain types of business combinations involving us.

Our by-laws allow the Board of Directors to adjourn any meetings of shareholders prior to the time the meeting has been

convened. We may issue shares of any class or series of preferred stock in the future without shareholder approval and upon

such terms as our Board of Directors may determine. The rights of the holders of common stock will be subject to, and may

be adversely affected by, the rights of the holders of any class or series of preferred stock that may be issued in the future.

Massachusetts state law also prohibits us from engaging in specified business combinations with an interested stockholder,

subject to certain exceptions, unless the combination is approved or consummated in a prescribed manner, and places

38

restrictions on voting by any shareholder who acquires 20% or more of the aggregate shareholder voting power without

approval by non-interested shareholders. As a result, shareholders or other parties may find it difficult to remove or replace

our directors or to effectuate certain types of business combinations involving us.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K, including the descriptions of our Business set forth in Part I, Item 1, our Risk Factors

set forth in Part I, Item 1A, and our Management’s Discussion and Analysis of Financial Condition and Results of Operations

set forth in Part II, Item 7, contains forward-looking statements. Forward-looking statements are not purely historical and

may be accompanied by words such as “anticipates,” “may,” “forecasts,” “expects,” “intends,” “plans,” “potentially,”

“believes,” “seeks,” “estimates,” and other words and terms of similar meaning. Such statements may relate to:

•our expectations regarding the amount of, timing of, and trends with respect to our financial performance, including

revenues, costs and expenses, and other gains and losses;

•our expectations regarding clinical trials, including expectations for patient enrollment, development timelines, the

expected timing of data from our ongoing and planned clinical trials, and regulatory authority filings and other

submissions for our therapies;

•our beliefs, expectations, and plans with respect to the commercial launches of CASGEVY for the treatment of SCD

and TDT, ALYFTREK for the treatment of CF, and JOURNAVX for the treatment of moderate-to-severe acute

pain, and the anticipated launch of povetacicept for the treatment of IgAN;

•our ability to maintain and obtain adequate reimbursement for our products and product candidates, our ability to

launch, commercialize and market our products or any of our other therapies for which we obtain regulatory

approval, and our ability to obtain label expansions for existing therapies;

•our expectations regarding our ability to continue to grow our CF business by increasing the number of people with

CF eligible and able to receive our medicines and providing improved treatment options for people who are already

eligible for one of our medicines, and our beliefs that the majority of people with CF will transition to ALYFTREK

over time;

•our beliefs regarding the support provided by clinical trials and preclinical and nonclinical studies of our therapies

for further investigation, clinical trials or potential use as a treatment, including with respect to povetacicept as a

pipeline-in-a-product and as a potential best-in-class approach for the treatment of IgAN, pMN, and gMG;

•the data that will be generated by ongoing and planned clinical trials and the ability to use that data to advance

compounds, continue development, support regulatory filings, or accelerate regulatory approval, including our plans

to complete the full submission for potential accelerated approval of povetacicept in IgAN in the first half of 2026

and to share data from the interim analysis of the Phase 2/3 clinical trial of inaxaplin in AMKD in late 2026 or early

2027 and from the Phase 2 trial in people with AMKD in mid-2026;

•our beliefs that ALYFTREK will provide additional clinical benefits to eligible people with CF, regarding the

durable efficacy and effectiveness of CASGEVY as one-time functional cure for people with SCD and TDT, and

regarding the clinical benefits of JOURNAVX without the evidence of the several limitations of other available

therapies;

•our plans to continue investing in our research and development programs, including anticipated timelines for our

programs, and our strategy to develop our pipeline programs, alone or with third-party collaborators;

•our beliefs regarding the approximate patient populations for the disease areas on which we focus;

•the potential benefits and therapeutic scope of our acquisitions and collaborations, including our acquisition of

Alpine and its lead asset, povetacicept, its potential to become a pipeline-in-a-product, and our expectations

regarding our agreements with Zai, Ono and WuXi;

•our expectations regarding the lower royalty burden for ALYFTREK;

•our plans to expand, strengthen, and invest in our global supply chains and manufacturing infrastructure and

capabilities, including for biologic and cell and gene therapies;

•the effects of import and export licensing requirements, tariffs, trade barriers, and other trade and travel restrictions;

•potential business development activities, including the identification of potential collaborative partners or

acquisition targets;

39

•our ability to expand and protect our intellectual property portfolio and otherwise maintain exclusive rights to

products;

•our expectations or beliefs regarding any legal proceedings in which we are involved, including any litigation,

arbitration or other similar proceedings involving our products, product candidates or activities;

•the establishment, development and maintenance of collaborative relationships, including potential milestone

payments or other obligations;

•potential fluctuations in foreign currency exchange rates and the effectiveness of our foreign currency management

program;

•our expectations regarding the amount of cash to generated by operations, our cash balance and expected generation

and interest income;

•our expectations regarding our provision for or benefit from income taxes and the utilization of our deferred tax

assets;

•our ability to use our research programs to identify and develop new product candidates to address serious diseases

and significant unmet medical needs;

•the effectiveness of our governance, plans and strategy with respect to managing cybersecurity risks and other

threats to our information technology systems;

•our ability to effectively implement artificial intelligence systems and tools;

•our ability to attract and retain skilled personnel;

•our expectations involving governmental cost containment and other regulatory efforts;

•our expectations surrounding the competitive landscape facing our products and product candidates; and

•our liquidity and our expectations regarding the possibility of raising additional capital.

Forward-looking statements are subject to certain risks, uncertainties, or other factors that are difficult to predict and

could cause actual events or results to differ materially from those indicated in any such statements. These risks,

uncertainties, and other factors include, but are not limited to, those described in our Risk Factors, set forth in Part I, Item 1A,

and elsewhere in this report and those described from time to time in our future reports filed with the Securities and Exchange

Commission.

Any such forward-looking statements are made on the basis of our views and assumptions as of the date of the filing and

are not estimates of future performance. Except as required by law, we undertake no obligation to publicly update any

forward-looking statements. The reader is cautioned not to place undue reliance on any such statements.

ITEM 1B.UNRESOLVED STAFF COMMENTS

We did not receive any written comments from the Securities and Exchange Commission prior to the date 180 days

before the end of the fiscal year ended December 31, 2025 regarding our filings under the Securities Exchange Act of 1934,

as amended, that have not been resolved.

ITEM 1C.CYBERSECURITY

Risk Management and Strategy

We recognize the critical importance of developing, implementing, and maintaining robust cybersecurity measures to

maintain the security, confidentiality, integrity, and availability of our business systems and confidential information,

including personal information and intellectual property. Our cybersecurity program includes systems and processes for

assessing, identifying and managing material risks from cybersecurity threats and include maintenance and monitoring of

information security policies aligned with global regulatory controls and aligned with National Institute of Standards and

Technology Cybersecurity Framework and System and Organization Controls 2. The program includes user and employee

awareness of cyber policies and practices; information systems configuration management; third-party risk management

systems; identity and information asset protection; infrastructure security systems; and cyber threat operations with

continuous monitoring and threat hunting. This program also includes processes to oversee and identify material risks from

cybersecurity threats associated with our use of third-party service providers. We engage a range of third-party experts in

connection with various development, implementation, and maintenance activities related to our cybersecurity program,

including audit and compliance, threat hunting, monitoring, and end-user support.

40

Our cybersecurity program is integrated into our overall risk management systems, including our annual enterprise risk

management program, internal audit program, business continuity and crisis management programs, third-party risk

management program, insurance risk management program, and employee compliance programs. As part of our overall risk

management program, we maintain a global insurance portfolio with comprehensive cyber coverage. Our Chief Information

Security Officer (“CISO”) and the Information Security function advises, consults with, or provides input to each of these

programs to ensure that material risks from cybersecurity threats are appropriately assessed, identified, and managed.

As of the date of this report, there have been no cybersecurity threats that have materially affected or are reasonably

likely to materially affect our business, operations, or financial condition. Similar to other companies, we have experienced

cybersecurity incidents, including temporary service interruptions of third-party suppliers. As of the date of this report,

however, known cybersecurity incidents, individually or in aggregate, have not had a material impact on our company. Over

the last three years, net expenses incurred from any information security breaches, including any penalties and settlements,

are not material relative to our total revenue. For additional discussion on cybersecurity risks we face, see Item 1.A, Risk

Factors – “A breakdown or breach of our information technology systems, or unauthorized access to confidential

information could adversely affect our business.” of this Annual Report on Form 10-K

Governance

While our board of directors has oversight responsibility for risk management generally, the Audit and Finance

Committee (“Audit Committee”) is specifically responsible for overseeing our cybersecurity risk management program to

ensure that cybersecurity risks are identified, assessed, managed, and monitored. Our CISO provides quarterly updates to the

Audit Committee in this regard, and covers the state of our cybersecurity program, supported by key performance indicators

across the range of cybersecurity functions related to risk management and governance, identity and information asset

protection, core security and endpoint security, and cyber threat operations. These updates include descriptions of

cybersecurity incidents of interest, including those associated with our third-party service providers; the board will be

informed promptly of material risks from cybersecurity threats.

We strive to create a culture of cybersecurity resilience and awareness and believe that cybersecurity is the responsibility

of every employee and contractor. At the same time, primary responsibility for assessing, monitoring, and managing our

cybersecurity risks lies with our CISO. Our CISO has more than 35 years of experience in security and information systems

and spent 25 years with Raytheon Technologies, most recently as Chief Technology Officer of Cybersecurity, Special

Missions, Training & Services. Our CISO supported the U.S. President's National Security Telecommunications Advisory

Committee for more than 20 years, is a member of the Massachusetts Cybersecurity Strategy Council, and previously served

as Chair of the Kogod Cybersecurity Governance Center at American University. He also served on the Rhode Island

Homeland Security Advisory Board and was a member of various commercial cyber product councils.

Our CISO oversees a team of skilled cybersecurity professionals who have Certified Information Systems Security

Professional credentials, Global Information Assurance Certification from the SANS Institute, and other security and network

certifications. The cybersecurity team monitors and evaluates our cybersecurity posture and performance on an ongoing

basis, including through regular vulnerability scans, penetration tests, and threat intelligence feeds. The cybersecurity team

uses various tools and methodologies to manage cybersecurity risk that are tested on a regular cadence, and assesses and

evaluates cybersecurity incidents, escalating certain cybersecurity incidents to the CISO according to protocol. The CISO is

continually informed regarding the performance of the cybersecurity program, as well as the latest developments in

cybersecurity, including potential threats and innovative risk management techniques aligned with industry standards. The

CISO reports to our Chief Digital and Information Officer, who is a Senior Vice President of the Company and reports

directly to our Chief Operating and Financial Officer (“COFO”). Our COFO is an Executive Vice President and an executive

officer of the Company, and reports directly to our CEO.

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AXTA	4 hours ago
TROW	5 hours ago
DCH	5 hours ago

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